Cash for Clunkers helped sell 26,000 cars in New Jersey

Tony Kurdzuk/The Star-LedgerThe popular Cash for Clunkers government program helped local auto dealers sell nearly 26,000 cars in the months of July and August.

The Cash for Clunkers program generated nearly 26,000 new car sales in New Jersey, giving auto dealers a much-needed boost and reaping $50 million in sales tax and motor vehicle fees for the state, according to industry data released today.

New Jersey ranked ninth out of 50 states participating in the two-month government program, with car buyer rebates totaling $103.4 million, according to the New Jersey Coalition of Automotive Retailers, which published the figures. Overall, dealers across the country sold more than 690,000 vehicles and claimed $2.88 billion in rebates during the program.

The program provided a lift for many of New Jersey’s 550 auto dealers, who have been struggling amid a severe downturn in the industry. New car sales had plunged 30 percent in the first half of the year, compared with the same period last year, the coalition said. Cash for Clunkers appeared to bring some relief in July and August, reflected by a less drastic sales decrease of 7.5 percent.

However, experts said the benefits from the program are just a Band-aid for the state’s auto industry, which has lost 20 percent of its dealerships over the last three years.

"It was much needed, much welcome, but not nearly enough to get the industry back to where it needs to be," said Jim Appleton, president of the coalition.

Nevertheless, sales under the program exceeded expectations, he said. New Jersey usually ranks 15th the nation for monthly car sales, but aggressive marketing, combined with pent-up consumer demand, helped propel the state into the top 10 for Clunker sales, he said.

The most popular brand choices among local consumers were Hyundai, Toyota, Honda, General Motors and Ford, Appleton said. Luxury brands were little affected.

The federal program, which gave new car buyers $3,500 to $4,500 for trading in older gas guzzlers for newer, more fuel-efficient models, has not been without hiccups. After being introduced in early July, it became so wildly popular that the funds ran out in less than two months.

Some local dealers said they ran into headaches recouping the money from the government, with a few payments trickling in as late as a few weeks ago. Adam Kraushaar, president of Lester Glenn Auto Group, said he sold more than 500 cars through the program at his five dealerships, totaling about $2 million in rebates. Some of that money did not arrive until late September, he said, which created "some angst, sleepless nights and cash flow issues."

But many car dealers said they are just hoping for a sequel to the Clunker program.

At Towne Hyundai in Denville, general manager Rene Cruz recalled how car buyers came rushing to his showroom. In all, he sold 230 cars under the program and claimed $800,000 in government rebates. It was a welcome boost, especially after a slow winter during which he sold on average 20 to 30 cars a month.

"It was total mayhem," he said. "There was a line into the actual lot of the dealership."

Now, he said, business has once again dropped off. "It was just a blessing. Now, it’s back to bad," he said.

Laura Botsacos, vice president of James Toyota in Flemington, said her dealership sold 212 cars under the program, or about $896,000 in rebates. But what she enjoyed most, she said, was the brief escape from the gloom surrounding the industry.

"There were nights we were here well past midnight, there was a great energy in the store," she said.

Ford's President of the America's discusses Cash for ClunkersMark Fields, President of the Americas for the Ford Motor Company sits down with Joe Perone to discuss the auto industry. In a preview, Fields discusses the cash for clunkers program and its impact on Ford's sales. Fields grew up in Paramus, N.J. and attended Rutgers University for his undergraduate degree. For the full interview, visit NJ.com on Tuesday, Sept. 1. (Video by Michael Monday and Andre Malok/The Star-Ledger)